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CRL Student Loan Summit Addresses North Carolina’s $41 Billion Debt

Thursday, December 6, 2018
Kelly Tornow

DURHAM, NC. – In response to the nation’s still-spiraling student loan debt, the Center for Responsible Lending (CRL) convened a day-long summit to examine the impacts and solutions for North Carolina.

People from around the state gathered at the Durham Convention Center for this working conference and included a wide variety of stakeholders that included: banks, colleges and universities, as well as advocates representing older Americans, veterans, community developers, low-income residents and others. Throughout the day, people shared their own powerful and personal stories of how student loan debt has changed their own lives and communities.

According to Kelly Tornow, CRL’s Director of North Carolina Policy, “Today is about working together to find ways to push our state to address this crisis. Today is about making sure that North Carolinians do not continue to experience crushing debt for simply trying to better themselves and to achieve the American Dream.”

“While we use the term, student debt, what we are really referring to is family debt that affects multiple generations,” said Wade Henderson, a CRL board member who delivered the summit’s opening keynote address and past president of the Washington-based Leadership Conference for Civil and Human Rights.

“Today, many parents have borrowed so heavily that monies that might have been dedicated to retirement funds are instead repaying student loans,” added Henderson. “Nor is it unusual for grandparents to borrow as well, often co-signing loans for the new graduates that run the risk of their Social Security benefits being garnished should the loans default.”

The crisis in North Carolina is staggering. Today, 1-in-3 North Carolina student loan borrowers in repayment is severely past due or in default on their student loans. Further and according to the most recent data from the Federal Reserve Bank of New York, outstanding student loans owed by North Carolinians is more than $41 billion.

Predatory for-profit colleges are a significant driver of student loan debt as students of these schools in the state are more likely to borrow, least likely to graduate, and more likely to default on these loans. Other key data points reveal that in North Carolina:

  • 18 percent of borrowers in non-white communities have student loan debt in collections, compared to 11 percent of borrowers in white communities;
  • 20 percent of people in rural communities have severely delinquent student loan debt, compared to 15 percent of people in Raleigh, Winston-Salem, and Charlotte;
  • Borrowers age 60 and older grew 91 percent in 2017 and collectively owe $2.49 billion; and
  • In 2017, North Carolinians submitted a total of 1,356 student loan complaints to the Consumer Financial Protection Bureau, and another 304 related complaints on debt collections – a 72 percent increase from 2016.

Today’s summit emphasized the important role that state-level laws and enforcement actions can play in providing solutions to this growing problem. Following a series of panel discussions, people discussed a number of possible policy recommendations in North Carolina such as:

  • Holding for-profit colleges to stronger accountability at the state level;
  • Increasing support for Historically Black Colleges and Universities; and
  • Ensuring students and borrowers are protected from student loan servicing abuses.

For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Charlene Crowell at charlene.crowell@responsiblelending.org.